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Eidos' Ian Livingstone has issued a tough warning to the Government, saying that the UK games industry will vanish if authorities don't act to properly address rising costs and the industry skills shortage.

Speaking in a Develop Q&A Livingstone, also a spokesperson for the Games Up campaign, said the UK was now the most expensive place on the planet to make a game.

"The Government should address the issues of skills and costs for the UK to remain competitive," said Livingstone.

"The UK is now the most expensive country in the world in which to develop. There are naturally cheap labour markets in Asia and also subsidised markets like Canada. The UK has slipped from third to fourth in world development. Given the heritage of development in the UK, this is a tragedy."

While developers themselves also have a part to play in remaining competitive, the Government must look to support them as well, he said.

"Clearly developers need to attract the best possible talent they can, ensure they have access to working capital and have the best management to run projects to budget and schedule in a very competitive landscape. And if they can create (and retain ownership of their) valuable IP, so much the better. As far as publishers go, there isn’t really any obligation for them to ensure the UK remains at the forefront of world development. Publishers want the best games from the best teams at the cheapest price. They go to wherever that deal is. Currently it is Canada that is the hot spot and hence it is up to Government to make it attractive for them to operate in the UK.

"Whilst the UK Government does nothing, developers will continue to shut down or be acquired by overseas companies who see greater long term value in our talent than we do ourselves. The Government needs to invest in this valuable Creative Industries asset or suffer the consequences."